Paying Taxes in Delaware

Updated on Saturday 10th December 2022

Rate this article
based on 3 reviews

Paying Taxes in Delaware Image
The Corporate Income Tax Return in Delaware is imposed on all companies registered in the state, with the exception that if not controlled from here, such businesses are not required to fill these documents. From the beginning, we mention that the corporate income tax is set at 8.7% and comes with a group of rules regarding the period in which the tax must be paid. If you want to start a business in USA, you should consider that complete guidance and details in this matter can be offered by our specialists in company formation in USA.

Corporate tax for companies in Delaware

Without VAT and sales tax, Delaware is among the favored states for doing business from a taxation point of view. LLCs in Delaware are subject to incomes that are divided among the shareholders. Each of them must pay the personal income tax, besides considering the corporate income tax which represents 8.7%, as a member of a company.

Depending on the business plans you have, you can open a branch in USA, taking into account the required formalities. with the help offered by our local agents, you can prepare the paperwork and submit it to the relevant authorities. Also, they can help you with opening a bank account and obtaining the EIN that proves that the company is registered for paying taxes.

The Franchise Tax in Delaware

Even if it is called the Franchise Tax, this fee is not imposed on franchise businesses in Delaware, but for companies in the state. This is an imposed tax in Delaware for LLCs, partnerships, and corporations and represents the privilege to have a company in Delaware. Limited liability companies and partnerships must pay on the first of March the annual Franchise Tax of $300. If you want to set up a company in USA, you should consider the taxation system and also the benefits that come with it.

A foreign entrepreneur can start a company in USA, in the desired field, and benefit from support from our local agents. Registering to pay taxes, opening a bank account, and obtaining a business license are among the most important procedures for setting up a company, and we can help you. Contact us if you have decided for business in one of the American states.

How tax returns are filled in Delaware

The corporate tax in Delaware can be paid one time but also in four parts, as mentioned below:

•    50% which is payable on/before the first day of the 4th month of the taxable year; 
•    20% which is payable on/before the 15th day of the 6th month of the taxable year; 
•    20% which is payable on/before the 15th day of the 9th month of the taxable year;
•    10% which is payable on/before the 15th day of the 12th month of the taxable year.

Please consider that penalties will be imposed if the payment terms are not respected by companies in Delaware.

Entrepreneurs who want to set up an LLC company in Delaware can do so with USD 1 as minimum share capital. Only one shareholder is needed to establish this structure and to open a bank account. Among the benefits of this structure, we mention the quick incorporation, the advantageous tax system, and the possibility of doing business outside the USA. We invite you to contact our team of company formation agents in the USA to benefit from support in terms of formalities.

The personal income tax in Delaware

In Delaware, the personal income tax for sums over $60,000 is set a 6.75% rate, which also represents the maximum personal income tax. As for the profits which are lower than $60,000, the imposed tax can be paid in 5 tranches, by both residents and non-residents in Delaware.

Penalties for companies in Delaware

If companies will not respect the period in which the taxes must be paid, these are subject to a 1% penalty each day or 5% per month but may vary. Also, interests of 1% are added to the entire sum until it is paid. One should also consider that a penalty of ½ % but not above 25% can be imposed for enterprises in USA which do not pay the fees for the submitted returns. 

No taxes for offshores in Delaware

Numerous investors decide to protect their assets through offshores where there are no taxes. Delaware aligns with the states where offshores can be registered without residency in USA and with no taxes on incomes. Investors from overseas are not entitled to file tax returns for their offshore companies in Delaware. Additionally, there are no taxes for offshore companies which do not have activities in USA or a place of business.

The USA company formation is an easy process which can be explained by our team of company formation agents in USA, so please feel free to contact us.